Go to the Globe and Mail homepage

Jump to main navigationJump to main content

The Calgary skyline is shown on Sept. 9, 2010. (Chris Bolin for The Globe and Mail)
The Calgary skyline is shown on Sept. 9, 2010. (Chris Bolin for The Globe and Mail)

Western opposition to Potash sale complicates PM's decision Add to ...

Growing opposition in Western Canada to a foreign bid for Potash Corp. of Saskatchewan is complicating what will be one of the biggest decisions Stephen Harper has ever made regarding this country's business sector: whether to hand outsiders a vital asset.

Most of the antipathy toward Australia-based BHP Billiton's $38.5-billion (U.S.) offer for Potash Corp. - on which Ottawa will render judgment Wednesday - has been centred in the fertilizer giant's home province of Saskatchewan and led by Premier Brad Wall.

More related to this story

But a new opposition front has emerged over the past few weeks in Mr. Harper's political backyard of Calgary, traditionally a stronghold of free markets and heavily dependent on foreign investment for oil and gas development.

Some Alberta business leaders have spoken up, while others are pressing MPs to take their message to Mr. Harper. Senior Tories say the Calgary concerns have made a decision on Potash more difficult.

Richard Haskayne, a veteran of Canadian boardrooms who's headed several of this country's biggest companies, is one Calgary businessman who's been lobbying Tory ministers to reject the takeover.

Mr. Haskayne, a former chairman of MacMillan Bloedel and Nova Corp., says a green light for BHP to take over Potash would be wrenching for Canada, given that four premiers oppose the deal.

"It's going to be as divisive as the NEP," Mr. Haskayne said, referring to the interventionist 1980 national energy program that infuriated Albertans.

Only a few days ago, BHP seemed confident it had satisfied Ottawa's "net benefit" test for foreign takeovers, paving the way for the deal to go through.

But lately the deal has apparently given Mr. Harper pause for thought.

In October, the Prime Minister tried to play down the significance of the BHP buyout offer, calling it merely "a proposal for an American-controlled company to be taken over by an Australian-controlled company."

On Tuesday, however, Mr. Harper sounded very different in the Commons, saying the deal will not be "rubberstamped" as he alleged such takeovers were by previous Liberal governments.

As the debate over the BHP offer played out, Potash Corp. was transformed in the public eye from a relatively arcane business venture into a symbol of national pride. The debate galvanized public support for keeping it Canadian, and three other premiers joined Mr. Wall in opposition to the bid.

Regardless of the outcome, the decision will be a defining moment for Mr. Harper, who's spent years trying to cultivate a reputation as a champion of foreign investment.

Opposition to the deal has risen even among Calgary oil and gas leaders who don't think Potash will affect their business.

"My vote is against it, just on a business sense," said Scott Saxberg, the chief executive officer of Crescent Point Energy.

But, he added, blocking a potash deal is very different than blocking an oil and gas deal. Allowing BHP to buy Potash could affect the global price for potash, he said, since it would give BHP control of such a vast percentage of global output.





Roger Gibbins, Calgary-based executive director of the influential Canada West Foundation, said there is a lot of wariness among oil executives - concerns he shares - because Canada's widely held companies can be as vulnerable as Potash Corp. to a foreign takeover. He said the country loses a lot when it loses head offices, including corporate engagement in communities and career opportunities.

Mr. Gibbins said the federal decision will send a major signal to the global marketplace.

"If it goes through, it sends the signal that we're open for business in a very big way," he said. "And if it doesn't, then it's a new ballgame [for foreign investment]with no clear rules."



















































With a report from Shawn McCarthy

Follow us on Twitter: @BrendaBouw, @stevenchase, @nvanderklippe

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories